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TIME UP FOR EPTC/MTN ‘DIVORCE’ TALKS

23/02/2020 00:03:00 BY WELCOME DLAMINI

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MBABANE – When two bulls fight, it’s the grass that suffers. As the talks between the Eswatini Posts and Telecommunications Corporation (EPTC) and MTN Eswatini regarding termination of their controversial Joint Venture Agreement continue to drag, the consumer is the one that bears the brunt.

This has even been admitted to by the Ministry of Information, Communications and Technology (ICT), which said even other industry players were casualties of this ongoing debacle.

“This has affected consumers and other industry players because it limits competition and that other service providers are not able to offer some services they wish to offer to the public,” said ICT Principal Secretary Maxwell Masuku.

The other industry player in this case is Eswatini Mobile, which holds the same technology neutral licence as MTN Eswatini and EPTC.
EPTC, however, cannot utilise its own licence because of the JVA with MTN Eswatini that bars the corporation from engaging in services that compete with MTN Eswatini.

majority

EPTC is also the majority shareholder at MTN Eswatini with 41 per cent.
The corporation now wants to operate its own mobile telephone network hence it wrote to the regulator – the Eswatini Communications Commission (ESCCOM) – seeking a way out of the JVA.

The regulator then gave the two parties a period of six months until August 7, 2019 to ensure divesture of EPTC’s shareholding in MTN Eswatini.
EPTC was ordered to take any actions, as may be necessary, to ensure it divests its ownership in MTN Eswatini and the latter was ordered to assist EPTC in implementing the divesture.

However, the six months lapsed without the divesture having been implemented and this led the regulator to afford the two telecommunications companies an extension of six months.

regulator

The extended deadline lapsed on February 7, 2020 and this was confirmed by the regulator after the Times SUNDAY made enquiries on what the forward was now that a second cut-off date had come and gone.

“It is true that the extended deadline for the Eswatini Posts and Telecommunications Corporation (EPTC) to divest its shareholding in MTN Eswatini ended on February 7, 2020. The Commission can confirm that discussions on the matter are still ongoing and ESCCOM is privy to the engagements between the parties,” responded Lindiwe Dlamini, ESCCOM’s Head of Strategy and Economic Regulation.

She did not divulge what had been agreed on between the two parties.
When asked if the regulator believed its decisions to be binding and respected by industry players in light of the failure by EPTC and MTN Eswatini to resolve the divesture as per ESCCOM’s order, Dlamini said their decisions and directive were adhered to as per the dictates of the industry players’ licence provisions.
She said the legislative instruments establishing the Commission provide for recourse in the event parties failed to abide by decisions and determinations.

fail

“Clause 4.4 of the JVA Investigation into the Joint Venture Agreement between MTN Eswatini (MTN) / Eswatini Posts & Telecommunications Corporation (EPTC) of 2019, divestiture decision, provides as follows; ‘in the event the parties fail to ensure the divestiture on the lapse of the Implementation Period, the Commission shall convene a hearing to establish whether any party is at fault, and in the event fault can be attributed to any of the parties, consider an appropriate penalty to be imposed’,” Dlamini said.

Unlike the ICT Ministry which admitted that the consumer and industry players were adversely affected by the ongoing unresolved divesture talks, she sought to portray a positive image of the obtaining scenario.

She said as part of the ESCCOM mandate, the regulator was entrusted with the responsibility of creating a conducive environment for competition in the industry.

“As such in 2017, the Commission licensed Eswatini Mobile as the third Operator in a bid to create a competitive telecommunications market. The telecommunications industry is highly competitive and there are several products and services that have been launched in the market, despite the JVA being in place,” she said.

There is perception, which Dlamini refuted, that the regulator was treating one of the two companies with kid gloves and, by so doing, putting consumers and other industry players at a disadvantage, much to the benefit of this other player.

dictates

Dlamini said the Commission was impartial in its operations and decision making, something he said was evidenced by the dictates of the decision that was taken when the EPTC and MTM Eswatini were ordered to ensure that the divesture was implemented.

“The Commission’s decision was equally binding to both operators and called upon both EPTC and MTN to ensure the divesture takes place,” she stated.
Asked whether the continued failure t resolve the JVA issue did not maintain the status quo that see MTN Eswatini continue to exercise dominance in the industry, Dlamini cited the Commission’s 2017 decision on dominance in the mobile voice market and in the fixed wireless voice market which declared MTN dominant in the mobile voice market and EPTC dominant in the fixed voice market.

“The introduction of competition is an indication of the steps being taken to address competition in the market,” she said.
Adding, Dlamini said pursuant to the provisions of the Electronic Communications Act of 2013, the Commission converted an issued technology neutral licences to EPTC and MTN Eswatini, which allow all operators to enter and provide services using any technology deemed appropriate.

This was after she was asked if it was fair to those who want to enter the industry to have MTN holding a mobile licence and also one of its majority shareholders (EPTC) holding a similar licence; whether this wasn’t some form of monopoly or continued dominance?

Meanwhile, Masuku, the ICT Principal Secretary, responding to a question on whether there was any possibility of the EPTC/MTN Eswatini being realised soon, said: “Once the exercise to evaluate the shares has been completed, the divorce will take place.”

evaluating

He said at the moment, the process of evaluating the shares was still ongoing.
Senior attorney Bongani Mdluli, who is the Chairman of the Swaziland Consumer Association, decried the continued failure to conclude the EPTC, MTN Eswatini separation.

“This is a big problem for us consumers because we need more competition in the industry; the continued delay in the separation is a huge disservice to us consumers. The separation must happen as soon as possible,” he said.

Mdluli said there more industry players the country had; the more the competition and these would result in consumers having a number of alternatives in terms of the products and services to be available.